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Digital Transformation of Manufacturing: Industrial Internet of Things

The Industrial Internet of Things (IIoT) refers to the application of Internet of Things (IoT) technologies in manufacturing.

Also known as Industrial Internet, it incorporates technologies such as big data and machine learning to harness sensor data.

The philosophy driving IIoT is that smart machines are accurate and consistent in capturing as well as communicating data. The collected information helps enterprises identify inefficiencies or problems quicker, and saves time, intelligence efforts, and money.  

Especially, in the manufacturing sector, IIoT has a great potential in the areas of quality control, green practices, sustainable manufacturing processes, supply chain tracking and improving overall plant efficiency.

How IIoT is transforming manufacturing sector

The earliest example of technological transformation of manufacturing sector was the advent of assembly line. Henry Ford revolutionized the automobile industry by installing moving lines to aid in the vehicle building process. Earlier, a single car was built in about 12 hours however with the help of assembly lines the manufacturing time was as low as two hours and thirty minutes. For instance, the assembly line method was used to build Model T which became a bestselling vehicle.  

Presently, manufacturing is experiencing a revolution driven by IoT and other intelligent/automated processes, which was not possible earlier. New technologies help enterprises gain deeper insights at each stage of the production cycle.  Thus, it increases productivity and a cost-effective measure since deficiencies are fixed quickly.

Modern manufacturing plants do not resemble the typical repetitious assembly lines of the early period of Industrial Revolution. Now, there are highly advanced systems embedded with sensors and automated equipment. The interconnected devices constantly relay data that enterprises can use to drive operational efficiency.

Better Quality Control
Defects may not be a problem for small scale products. However, in large-scale production such as vehicles, furniture, smartphones etc.), defects can cause major problems. A single defect may lead to a loss of million dollars.

Thus, improving quality and product efficiency becomes the need of the hour. Connected machines and devices are key to realize these objectives.  

Let us take an example of a simple tool, like a torque wrench, which is used for assembling complex parts. It will be difficult for a plant manager to manually keep track of which employee used it last or the date of calibration.
However, connected devices will capture real-time information; faults, if any, can be traced back to its root cause for quick repairs. 

Inventory Optimization
Inventory management i.e. ordering, storing, and tracking of products, requires maintaining inventories at optimal levels. If an inventory fails to move, it wastes shelf space; additionally, if the items are out of stock, it will lead to revenue losses. Both conditions act as opportunity costs for an enterprise.  

IoT helps you resolve this problem. Now, you can track inventory products and closely monitor stock levels. It leads to improved inventory management because enterprises will now receive real time notifications whenever the items reach lower levels. Automatic orders will be generated for new inventory to ensure new products reach your warehouse on time. In addition, you can discard poor selling items and replace them with products having better potential. 

Use cases

Presently, GE customers are utilizing IIoT and big data analytics for managing asset performances i.e. analytics is applied to predict and prevent disastrous failures on plant floor equipment such as compressors or boilers.

Siemens PLM Software identifies IoT as a great technology to monitor plant operations. As Alastair Orchard, VP – Digital Enterprise Project states, "One of the factors that has stopped us in the past from delivering digital goodness to the customer is the relatively laborious task of equipping factories with all the necessary sensors and getting data organized and contextualized so it is available for simulation and analytics.” He also added, "IoT allows us to sprinkle devices around the factory quickly and cost-effectively to find out what's going on without going through the multiyear process of reorganizing the shop floor."


Risks and Benefits of Connected Devices

Several industries are discovering that IoT offers improvements in the areas such as operational efficiency, plant safety, data-driven decision making as well as infrastructure.

An obvious example that is popular nowadays is the development of smart cars i.e. autonomous (“driverless”) motor vehicles. The World Health Organization (WHO) has recorded the annual number of auto-related deaths globally as above one million this year. Majority of these deaths are caused due to human error.

In this aspect, IoT comes to your rescue. Safety-focused sensors embedded in automobiles, has the potential to dramatically reduce motor-vehicle related accidents and deaths, especially when embedded in autonomous cars and other vehicles.

According to industry experts like Gartner, McKinsey, and IDC, there will be about 30 billion connected devices by 2020. 

connected devicesOther benefits of IoT in the manufacturing sector is that it provides safety to workers with the help of wearable technology; embedded sensors warn workers about hazardous conditions such as toxic gases, over-exertion etc. Secondly, strategic placement of IoT devices throughout across the manufacturing plant helps managers’ access real-time insights into problems/issues even before they occur.

In the healthcare industry, IoT has exhibited a great potential. Healthcare workers are now able to closely monitor the condition of their patients. For instance, paramedics use connected devices to gather critical patient data and transfer it to the ER; in this way, by the time a patient is admitted, doctors already draft a plan of action. It saves valuable time that would otherwise be wasted to understand the medical history of the patient.

Many such examples we witness in our daily lives. However, there is no free lunch. IoT also comes with its own set of potential risks that you need to consider.

Three major risks of IoT that enterprises face today include privacy, liability, and cybersecurity.

Privacy concerns date back to the introduction of cookies/tracking software; addition of connected devices has led to a rise in monitoring of personal data; it increase security concerns for most of the users, in their private and professional lives. Since no government regulation governs the capture and use of personal data, it will require strict laws and regulations to maintain equilibrium between IoT’s benefits and privacy-related issues.

Another familiar risk is that of cybersecurity, which will likely make matters worse for IoT. A node present on the network acts as a soft target for hackers; hence, overall network security will become a bigger challenge for enterprises than now.

Liability risks involve instances when IoT devices can quickly generate legal and ethical conflicts that you do not know how to solve. For instance, if we feed instructions to a driverless automobile related to protecting its occupants from harm, does that mean that the vehicle can harm other pedestrians or motorists in a bid to save the occupants? In this case, who will be accountable?

IoT promises enormous benefits to consumers and businesses in the near future. However, to avail these benefits, we must find effective ways to deal with these associated risks.

Big Data – Key To Successful Industrial IoT

Data analytics is a core component of the Industrial Internet of Things (IIoT).

Many manufacturers are pursuing technologies like IIoT and big data, because these technologies serve as good means of maximizing revenue. Unscheduled downtime and other supply chain management issues are the major threats to revenue, however both these issues can be dealt well with IoT and Big Data.

Industry experts believe that big data analytics could help lower incidents of:

  • Equipment breakdowns
  • Unscheduled downtime
  • Unscheduled maintenance
  • Supply chain management issues

However, a consensus has not been reached yet. Many enterprises are not currently investing in these technologies while few enterprises do not have any investment plan for incorporating big data analytics in their venture.

Enterprises list the following reasons, why they haven’t yet planned to invest in such technologies.

  • Most of the organizations believe they have a system in place that will ensure safety, productivity, and organizational success.
  • Few enterprises have experienced sustainable growth without using big data analytics.
  • Most of the enterprises are still unclear about the benefits of big data analytics
  • Some enterprises feel the benefits of big data are overhyped.

A June 2015 McKinsey report, “Unlocking the Potential of the Internet of Things,” suggests the “IoT has a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. At the top end, that level of value… would be equivalent to about 11 percent of the world economy.

Necessary precautions aside, neither conventional suppliers nor the startups will stop innovating. Modern power generators must acquaint themselves with IIoT in order to avoid potential risks in the future and maintain a competitive edge.

The reality is that we’re already heading towards an IIoT. There are innumerable industrial control systems and power plants connected to the Internet. The IIoT’s maturity will be prolonged and revolutionary when its full potential will be tested.

Are you ready to invest in Industrial Internet of Things? Still having doubts about its value for your enterprise? Take sound advice from our experts.